SMIC's 2023 performance data shows that revenue fell by 86%, net profit **60%, and TaiUMC also suffered a 25% decline in revenue and a 49% decline in operating profit during the same period3% dilemma. While SMIC prioritizes securing market share, while TSMC is more profit-focused, there is a clear difference in their business strategies. The global chip industry as a whole is at a low ebb, which has brought huge challenges to chip foundry companies. Recently, there have been ** reports that chip foundry companies in Chinese mainland have fought for orders with more sincerity, resulting in some overseas companies beginning to hand over chip orders to Chinese mainland companies, which has supported the domestic foundry market to a certain extent.
Expansion: SMIC and Taiwan UMC, as the two major chip foundry giants in Chinese mainland and Taiwan, are facing severe challenges such as intensified market competition and declining chip **. SMIC's strategy of securing market share and TSMC's tendency to maximize profits also reflect different business philosophies. On the whole, the global chip industry as a whole is sluggish, and chips continue to be in recession, which also brings a lot of operating pressure to chip foundry companies. Recently, it has been reported that chip foundry companies in Chinese mainland have begun to attract orders with more attractive **, gradually encroaching on overseas market share, which also opens up a broader development space for chip foundry companies in Chinese mainland.
SMIC and TSUC have made different choices in the face of price reduction competition, with SMIC choosing to maintain market share and TSUC preferring to preserve profits. Chinese mainland chip foundries occupy an important position in the global market, and domestic chip companies have achieved significant sales growth in recent years, which has also won more market share for Chinese mainland companies such as SMIC. With the gradual tilt of orders in the international market to Chinese mainland, non-mainland chip foundry companies have also begun to feel the competitive pressure from Chinese mainland enterprises. Although the global chip industry as a whole is in a state of recession, chip foundries in Chinese mainland have attracted orders by cutting prices to ensure the operation of their production lines. In this foundry war, chip foundry companies in Chinese mainland have shown stronger market competitiveness, even if they need to reduce the cost of profits.
Expanding: SMIC and Taibudian have made very different choices when faced with price reduction competition, with the former prioritizing market share and the latter prioritizing maintenance margins. Chinese mainland chip foundries play a pivotal role in the global market, and the rapid development of domestic chip companies in recent years has also won more orders for Chinese mainland companies such as SMIC. With overseas orders tilted towards Chinese mainland, non-mainland OEM companies have also begun to feel the competitive pressure from Chinese mainland. Despite the overall recession of the global chip industry, chip foundries in Chinese mainland have ensured the normal operation of production lines by reducing prices to attract orders. In this fierce foundry ** war, chip foundry companies in Chinese mainland have shown strong market competitiveness, even if they need to bear the cost of reduced profits.
Chip foundries in Chinese mainland have certain advantages in terms of bearing cost pressure compared with Taiwanese companies. The equipment of SMIC and other Chinese mainland companies is relatively new, the equipment cost sharing is heavier, and the profit margin can be on par with companies such as Tailian, reflecting the advantages in cost control. Although chip foundry companies in Chinese mainland are facing greater pressure in the foundry war, once the chip depreciation cost falls, they can further reduce production costs and improve profits. During the downturn in the global chip industry, the cost control ability of various chip foundries will become the key to competition, and whether they can attract more orders will be extremely important. Chip manufacturers in Chinese mainland choose to sacrifice profits to win more orders and ensure the continuous operation of production lines, a strategy that may be the wisest choice for Chinese chip foundries as they continue to accumulate technology and strive to develop more advanced processes.
Expansion: Chip foundries in Chinese mainland have obvious advantages over Taiwanese companies in terms of cost control. For example, SMIC and other companies have a faster equipment replacement rate, better equipment cost sharing benefits, and the profit margin can be the same as that of companies such as Tailian, showing their strength in cost management. Although under greater pressure in the foundry competition, once the chip depreciation cost is reduced, chip foundry companies in Chinese mainland are expected to further reduce costs and improve profitability. In the downturn of the global chip industry, the cost management ability of chip foundries will become the key to competition, and it is particularly important to strive for more orders. Chinese mainland chip manufacturers choose to sacrifice profits to keep production lines running in order to get more orders, a strategy that may be the wisest choice for Chinese chip foundries as they continue to accumulate technology and strive to develop more advanced chip processes.
Chinese mainland chip foundries are playing an increasingly important role in the global chip market, especially in the current fierce competition among foundries, SMIC and other Chinese mainland companies have maintained their market share by cutting prices to win orders. At the same time, Taiwan's chip foundries are choosing between profits and the market, showing different business philosophies. Chinese mainland enterprises have advantages in cost control, and the advantages of equipment renewal and cost control make them more competitive. In the future, with the continuous innovation and accumulation of technology, chip foundry enterprises in Chinese mainland will further enhance their strength and play a more important role in the global market. In the game of the global chip industry, chip foundry enterprises in Chinese mainland will continue to work hard to maintain competitiveness, strive for more market share and orders, and contribute to the development of the entire industry.